Is NFLX Stock a Buy Ahead of Earnings? 3 Analysts Weigh In on Netflix.

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Netflix (NASDAQ:NFLX) is set to report earnings today after the bell, although investors are concerned that the streaming provider could post a slowdown in subscriber growth. Inflation, market saturation in the U.S. and competition from other streaming services could all lead to lower subscription growth for the first quarter. That would be bad news for NFLX stock.

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For Q1, analysts expect 2.51 million new subscribers, which is less than the 3.98 million additions the company reported a year ago. Those 2.51 million new subscribers would mark the “smallest quarterly addition for Netflix since the second quarter of 2021.” The company’s withdrawal from Russia back in March could also have hurt revenue and new subscriber guidance. Cowen analyst John Blackledge believes the withdrawal will have reduced Netflix’s subscribers by about 1 million.

Here’s what else investors should know ahead of the Q1 report.

NFLX Stock: Earnings After the Bell

For the period, analysts expect earnings per share (EPS) to come in at $2.91. That’s quite the decline from $3.75 a year ago. Meanwhile, the consensus analyst estimate for revenue lies at $7.95 billion. That represents 11% year-over-year (YOY) growth.

With mounting competition from streaming services like Disney’s (NYSE:DIS) Disney Plus and Warner Bros. Discovery’s (NASDAQ:WBD) HBO Max, some investors are expecting an increase in U.S. customer churn during the quarter. However, Netflix’s international prospects do seem to be a bright spot.

Last quarter, the company added 3.5 million new subscribers from Europe, the Middle East and Africa. That was about triple the amount it brought in from the States. In the Asia-Pacific region, NFLX also brought in 2.6 million new subscribers. Overall, the company brought in 8.3 million subscribers last quarter.

With that in mind, let’s take a look at how Wall Street analysts view the company.

3 Analysts Weigh In on Netflix

  • Morgan Stanley has a price target of $425 for NFLX stock. Analyst Benjamin Swinburne lowered his target from $450, believing shares will not perform well without increased subscriber growth. Swinburne does note that market sentiment around Netflix is “overly bearish” right now. However, the analyst also asserts that “net adds expectations at Netflix appear too high.”
  • Jefferies has a price target of $415 currently. Analyst Andrew Uerkwitz doesn’t expect to see acceleration in new subscriptions for Q1 due to account price hikes and geopolitical turmoil in Europe. The analyst also believes that Netflix’s management will maintain a “steady-as-she goes tone,” which will account for a lack of catalysts in the near term.
  • Finally, Rosenblatt has a price target of $354 for NFLX. Analyst Barton Crockett believes that Netflix’s subscriber growth will falter during the quarter due to competition and “changing consumer behavior post-Covid.” Crockett also says he may become more bullish if the company makes a stronger move into advertising.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/is-nflx-stock-a-buy-ahead-of-earnings-3-analysts-weigh-in-on-netflix/.

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